Small-Cap to Mid-Cap
Moving to small-cap to mid-cap, the set of challenges are somewhat different. We characterise micro-cap to mid-cap as companies that have realised a reasonable degree of maturity, although the difference between a $50 million small-cap versus a $3 billion mid-cap are significant.
Often these businesses are popular with investors, offering potentially more stability whilst offering significant growth or turnaround potential. At this stage, arguably a more structured and deliberate approach is taken to finding the right leaders who have the skillset of being able to build sophistication into a business to help it to reach greater scale. Leaders at this stage will likely be tasked with driving discipline and process into a business to drive a transformation agenda or supercharge growth.
Pieter Ebeling, Partner and part of the Scale Up Collective in The Netherlands provided some additional context:
Micro and small-cap structures require organizations to be agile and have leadership teams reflecting this.
From a competency perspective (based on our Leadership Evolved model) most of the time, this requires C-level members to envision a future and a roadmap for their domain based on the overall strategy, as well as being operationally strong, and invested enough to make sure changes are made at pace and made well.
Pieter Ebeling, Senior Partner Private Equity, Odgers Berndtson Netherlands
Detail orientation and being data-driven are essential traits overlayed by a need to still be decisive and action orientated. They should feel comfortable in making decisions and effectively operating in a high-pressure environment, as well as being excellent team builders. Overall, visionary leadership, with attention to detail to execute change is critical at this stage.
The relative size and reasonable maturity of these kind of portfolio companies give room for a more structured and standardised HR approach for leadership development and value creation realization. Odgers Berndtson has developed our leadership assessment to assist clients at this stage. Through quantitative psychometric assessments we provide objectified insights about the strengths of a team and or team members, or C-suite leaders, tailored to this stage of evolution.